The Zombie program in President Obama’s health care budget is dead. Or is it? The AP says that the Obama has finally agreed to dismantle one of the centerpieces of its health program because its activation would bankrupt the government.
The Obama administration Friday pulled the plug on a major program in the president’s signature health overhaul law – a long-term care insurance plan dogged from the beginning by doubts over its financial solvency….
Known as CLASS, the Community Living Assistance Services and Supports program was a longstanding priority of the late Massachusetts Democratic Sen. Edward M. Kennedy.
Although sponsored by the government, it was supposed to function as a self-sustaining voluntary insurance plan, open to working adults regardless of age or health. Workers would pay an affordable monthly premium during their careers, and could collect a modest daily cash benefit of at least $50 if they became disabled later in life. The money could go for services at home, or to help with nursing home bills.
But a central design flaw dogged CLASS. Unless large numbers of healthy people willingly sign up during their working years, soaring premiums driven by the needs of disabled beneficiaries would destabilize it, eventually requiring a taxpayer bailout.
After months insisting that could be fixed, Health and Human Services Secretary Kathleen Sebelius, finally admitted Friday she doesn’t see how.
“Despite our best analytical efforts, I do not see a viable path forward for CLASS implementation at this time,” Sebelius said in a letter to congressional leaders.
The law required the administration to certify that CLASS would remain financially solvent for 75 years before it could be put into place.
But officials said they discovered they could not make CLASS both affordable and financially solvent while keeping it a voluntary program open to virtually all workers, as the law also required.
The program was known as the “zombie in the budget” because officials feared that its cancellation would make it impossible to claim savings resulting from its undead status. The latest AP story says officials are scratching their heads to figure out how to replace the “savings” from the CLASS program which only existed on paper.
The demise of CLASS immediately touched off speculation about its impact on the federal budget. Although no premiums are likely to be collected, the program still counts as reducing the federal deficit by about $80 billion over the next ten years. That’s because of a rule that would have required workers to pay in for at least five years before they could collect any benefits.
Perhaps it is all for the best that this particular zombie has been killed before some poor sap was forced to pay into it for at least five years only to have it reallocated in the interests of fairness. But movie afficionados know that you can never be certain that all the zombies in the vicinity are truly dead until every space in the house has been minutely examined.
Administration officials remained confident that “even without CLASS premiums … the health care law will still reduce the deficit by more than $120 billion over 10 years.” Whether that dark mansion is now safe to enter only time will ….[tape ends here]
[continuation of tape found] Greetings friends. It is all clear inside the old dark mansion. And by the way the Wall Street Journal reports that Solyndra Came Close to Landing Navy Deal … [tape ends here again]